Lloyds to axe 9,000 jobs and close 200 branches as it eyes digital growth

The end of the high street bank moved a step closer today as taxpayer-owned Lloyds Bank announced 9,000 job cuts and the closure of 200 branches as part of a digital revolution.

Lloyds, which received a £20 billion Government bailout during the financial crisis six years ago, said customers will increasingly be expected to use online banking or self-service facilities within branches instead of dealing with staff face-to-face.

The closures — 10 per cent of the bank’s network of 2,000 branches — spell an end to Lloyds’ commitment to be the “last bank in town”.

The company has gone ahead with the closure plan despite announcing a 35 per cent rise in underlying profits in the first nine months of the year — with a surge of 41 per cent in the past three months.

Lloyds’ profits now amount to some £6 billion in the past year, which bodes well for the taxpayer recovering chunks of the £20 billion poured into the bank six years ago to keep it afloat.

Related stories

The cutbacks are part of a major move into digital technology and investment in home banking, which are seen as the future. A three-year plan aims to automate many operations to save £1 billion a year by the end of 2017.

Lloyds’ decision to swing the axe on its staff and branches was condemned by union leaders.

Rob MacGregor, the national officer for Unite, said: “The wallets of top executives at Lloyds should not be getting fat by forcing low-paid workers onto the dole. If there are compulsory redundancies or customer service suffers then executive pay should be cut.”

Chief executive António Horta Osório said: “It is very disappointing to have to announce these job losses and branch closures. We closed zero branches in the last three years because that was what we committed to do.

“We will still have the largest branch network after closing a net 150 branches and we will close fewer branches than our rivals.”

The £2.2 billion profits made over the past three months alone rolled in as bad debts fell and the UK economy improved. But the bank was hit by an unexpectedly high extra £900 million charge for mis-selling PPI in the past, which takes the total cost of that scandal for Lloyds to £11.3 billion.

Shares in Lloyds fell 2p, or 2.5 per cent, to 73.34p. That is below the average 73.6p paid by the taxpayer during the 2009 bailout.

The Treasury owns 25 per cent of Lloyds and looks increasingly unlikely to able to sell the stake before the general election next May.

Lloyds is in discussions with regulators at the Bank of England to be allowed to pay its first dividend since 2008. Today it said those discussions continue and it is confident it will get the go-ahead.

Mr Horta Osório also made a commitment to Lloyds customers that they would continue to enjoy free banking. He said: “Customers in the UK have got used to and appreciate free banking. I do not agree with those in our industry who say free banking inhibits or prevents competition in the current account market. We are absolutely focused on what our customers want.”

Rival Barclays announced in May it is to cut 19,000 jobs by 2016, with more than 9,000 to go in the UK.

Today Standard Chartered, the London headquartered but Asian-facing bank, saw its shares fall 10 per cent to a five-year low after it warned that its profits in the second half of the year would be less than last year’s.